Abstract: Cost allocation in a knowledge chain is one of the important factors that affect the stability and effectiveness of the knowledge chain. A model is presented for cost allocation for a knowledge chain with three partners by using cooperative games. With this model, analysis is carried out for both serial-parallel and parallel-serial structures. It is found that the parallel-serial structure performs better than the serial-parallel one. Hence, the cost is first allocated into three stages: supply, production, and sale, in a serial way. Then, at each stage, the cost is allocated into the partners in a parallel way by using experts' poll. An example is used to illustrate the application of the proposed method.